Hispanic immigrants cry foul over an alleged St. Louis housing scam

This Wednesday the Adewunmis' business partners, Dean Porter and Marty Ribaudo of the Des Peres-based RE/MAX Associates Plus, formally severed ties with the brothers because of the lawsuit. (Prior to forming the partnership, all four brokers worked for a similarly named RE/MAX agency, RE/MAX Associates, which had offices in Clayton and Des Peres.)

Ribaudo says he's discussed the case with Joseph Adewunmi, and though he's seen no evidence of wrongdoing, he felt it best that they part company.

"This concerns us greatly," Ribaudo says. "This is our livelihood and reputation on the line. We're just as anxious to get to the bottom of this as anyone."

Jennifer Silverberg

According to its owner, the del Rio home is still in need
of repairs.

A freckled, quiet 60-year-old from the Mexican state of Michoacán, Alfonso del Rio secured his green card in 1990 and has since worked a number of low-wage jobs in California and Arkansas.

Six years ago he landed in St. Louis. His most recent job has him washing dishes for the tony Racquet Club Ladue. Del Rio earns just $8 an hour, but that didn't stop him from buying a home last year through RE/MAX Associates Plus agent Christian Joel Juan.

Speaking in Spanish, del Rio tells how he calculated a budget allowing him to afford, at best, a $70,000 home with a monthly mortgage of around $600  and that's only if his live-in daughter, Maria, helped make payments. But, del Rio says, Juan kept steering him toward more expensive homes, first telling him he qualified for an $88,000 loan, then upping that figure to $105,000.

After viewing just four homes last summer, del Rio recalls, he felt pressured in August 2005 to purchase a house Juan showed him on Dahlia Avenue in south St. Louis. The home was being remodeled, but, according to del Rio, Juan assured him that everything would be fixed by the time he moved in.

Unbeknownst to del Rio, the home was owned by Juan's employer, Joseph Adewunmi, and his Cots Realty Investments. Schmitt and Arango's lawsuit alleges that the only homes agents Juan and Olmos showed their Spanish-speaking clientele were properties owned by Cots Realty.

Adewunmi and Juan counter that they show clients a wide variety of homes; it just happens that the homes sold by Cots Realty Investments are affordable for immigrants.

Del Rio's home cost $135,900; his monthly mortgage payment is $960. How can a dishwasher afford such a place? Because del Rio's loan documents  allegedly prepared by Juan, according to the suit  showed him earning far more than his annual income of $16,497. The application included payment stubs and tax returns claiming del Rio held down a second job earning $23,000 per year as a laborer with Spectrum Group Inc.

Del Rio says he never worked for any such company. Records with the Secretary of State's office show that a company with a similar name operated in Missouri for a short while in the 1990s but went out of business in 1997.

Adewunmi and Juan deny any role in the alleged manipulation of del Rio's loan documents. From their files they produce a contract written in English and Spanish and signed by del Rio that states he provided them with correct and accurate loan information, including tax records, paycheck stubs, bank statements and credit information.

Adewunmi and Juan place the blame on the loan officer, Jeffrey Epple, another of the co-owners of RE/MAX Associates Plus, as well as a defendant in the lawsuit. Adewunmi and Juan say it was Epple's job to verify the loan information. (Epple could not be reached for comment.)

"All I do is run their credit scores," Adewunmi says. "I rely on the lender to check the loan information. They're the ones who are supposed to do that."

Schmitt and Arango list del Rio as the named plaintiff in the class-action suit because of his legal status in the United States. But based on the attorneys' research, there may be as many as 70 other potential plaintiffs who've purchased homes owned by Cots Realty Investments over the past three years and whose loan documents have been falsified.

"We really don't know how many people may have been impacted," says Schmitt. "That's why we filed as a class-action. We're hoping more people will come forward."

The attorneys say del Rio (as well as other Hispanic homebuyers) never met with anyone other than the real estate agents when buying the home. The suit alleges the defendants purposely interposed themselves between the alleged victims and all other entities customarily involved in the purchase of real estate.

"They never let them meet with the appraiser, the loan officer or a representative of the title company," says Schmitt. "There was never any third party to say, 'Hey, wait a second. Do you know what you're signing?'"

Adewunmi refutes that claim. Yes, his real estate agents shepherd clients through the home-buying process, but that's only because clients need the agents to serve as interpreters.

"Most of the time, lenders or the title company don't speak Spanish, so I've hired agents who can help them through the process," says Adewunmi. "I've asked HUD [the United States Department of Housing and Urban Development] and the Realtors Association to provide me with forms in Spanish and I'd pay for them, and I wasn't able to get any of those forms."